By DAN REYNOLDS, senior editor of Risk & Insurance®
This logic may be ripening too late for the national debate on healthcare reform, but one could argue that a focused, surgical approach to reform in its sister science of workers' compensation has clear-cut advantages over the sweeping workers' compensation overhauls undertaken in some states.
In our three-part series on the unintended consequences of workers' comp reform, Risk & Insurance® focuses on three states with big economies--Texas, California and Florida--where attempts at sweeping reforms in workers' compensation have had or could have serious unintended consequences.
For example, the lowering of the pharmacy fee schedule in California has resulted in an eruption of drug overutilization. Attempts to reign in "ghost" PPO networks in Texas may unwittingly cancel out the ability of pharmacy benefits managers to do business at all in that state.
Corral one type of abuse in workers' comp, our research found, and the free market will find a new path to profits and make you pay even more than you ever thought you might for pharmacy or disability assessments.
But in Arizona, things look to be unfolding in a way that could be instructive. The state is taking a simple, step-by-step approach to curtailing the overuse of expensive painkillers, a factor that more than any other in workers' compensation nationally appears to be spiraling out of control with nothing to check it.
"We wanted to take a modest step toward controlling the use of narcotics in workers' compensation cases," said Jim Stabler, the general counsel for the State Compensation Fund of Arizona.
The state fund in Arizona decided it could perhaps win the war by at first winning one battle, the misuse of the powerful painkilling agent Fentanyl. Fentanyl was developed, according to Stabler, as a powerful painkiller that was never meant for use in less severe cases.
"Fentanyl was approved only for severe breakthrough pain in terminally ill cancer patients that were already on other painkillers or narcotics and usually in end of life situations," Stabler said.
But the state was finding evidence that it was being asked for and consumed in workers' compensation cases of a much more day-to-day nature, for things like lower back strains. Not only are Fentanyl-based drugs far more powerful than a patient with a lower backache or a headache needs, they are also extremely dangerous if taken improperly.
"Secondly, they are hugely expensive and, thirdly, there is the issue of diversion: Are they really using the drug or selling it or sharing it, whatever. So those are the three things that we are aiming at which the legislature agreed to," Stabler said.
"We wanted to start out with a very narrow law to attack the worst part of that problem, which was off-label use of these very addictive and dangerous narcotics that were designed to help cancer patients, not low-back-pain patients," Stabler said.
The narrowness and precision of the argument made it hard for anyone to argue against it and thus consensus was achieved, something next to impossible in this discipline with so many stakeholders.
The state's physician's trade group the Arizona Medical Association didn't argue. Neither did the workers' compensation plaintiff's attorneys, Stabler said.
"They didn't want to be on record as saying, 'We want out clients to have these addicting drugs,' " Stabler said.
And in the state's approach to monitoring the prescription of Fentanyl-based drugs, according to Stabler, regulators are avoiding a heavy handed approach.
Doctors are sent a survey asking them to justify why they are prescribing that particular drug, not telling them to do anything in particular.
"All the statute provides is that the doctor must respond to those questions, and if they don't, we don't have to pay them for the office visit," Stabler said.
Stabler and the rest of his associates are next taking aim at the overuse of Oxycodone. And in their focus on Fentanyl and Oxycodone, they are trying to get a grip on two medications that are seeing some of the most dramatic increases in use.
In the United States, the use and abuse of opioids is driving workers' compensation costs like never before. Consider some of this data on opioid use from the Tampa, Fla.-based pharmacy benefit manager Healthesystems.
In 1997, there were 4.44 million grams of Oxycodone sold in the United States. By 2005, that number had grown to 30.62 million grams, an increase of some 588 percent.
There were 8.66 million grams of Hydrocodone, another opiate, sold in 1997, and by 2005, that amount had risen to 25.80 million grams. Fentanyl, the drug Arizona first focused on, has seen its use explode in the past eight years--from 74, 086 grams in 1997 to 387,928 grams, according to data provided by Healthesystems: That's an increase of 423 percent.
The situation isn't completely dire in other states. Some industry leaders outside of Arizona are getting a grip on it even if the national numbers are horrendous.
"I very strongly believe that you can control a claim if you can control the drugs at the very beginning of the claim," said Krista Fergason, division director of risk management services, workers' comp administration, for the Texas Association of School Boards.
Fergason's association has lowered drug costs by 45 percent in the last 18 months in part by establishing a peer-review system for doctors that focuses on Schedule II narcotics, those thought to be highly prone to addition or abuse.
Herman Wilks, the association's department director of workers' compensation claims administration, received a 2009 Risk InnovatorTM award from Risk and Insurance® for the work he did in implementing the peer-review system.
In most states, when you ask why painkillers are being oversubscribed, you get two answers. One is that doctors can't stand up to patients who want the "latest and greatest" drug they can get. The second is that there are a handful of doctors in every environment who are crooked: That's what Stabler seems to think.
"I'm sure, as has been the case in other states, there is a handful of doctors out there that are responsible for prescribing 75 percent of the stuff in the state," said Stabler. "They are the drug pushers clear and simple, and they are the ones that are somewhat noncompliant."
But Stabler, like others, also refers to armies of drug company reps that lay siege to doctor's offices and push the pushers to prescribe things like Fentanyl and Oxycodone in the numbers that we are seeing them prescribed in.
Nationally, the United States, which is 4.5 percent of the global population, consumes 65 percent of all illegal drugs and 80 percent of all opoids. We are a drugged nation, and here's to those of us, like executives with the state fund in Arizona, who have the courage and foresight to stand up and attempt to get a grip on the problem.
October 15, 2010
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